Chicago-based RR Donnelley said Tuesday it will pay $70.5 million to acquire Edgar Online, the Rockville company that creates software to help corporations and investors manage and submit regulatory filings.
The value of the deal includes $1.092 per common share, assumption of debt and a payment equal to the redemption price of the preferred shares, the company said. It is expected to close in the third quarter.
The companies have worked together since 2008, when Edgar began providing XBRL software services to RR Donnelley’s financial services business. XBRL, or eXtensible Business Reporting Language, is a type of Web coding used to report business information in an interactive format.
The format is used by an increasing number of federal agencies. The Securities and Exchange Commission passed guidelines in 2008 that required all publicly traded companies in the United States to integrate XBRL into their financial reports on a rolling basis.
The last of those mandates should go into effect this year, and the new reporting requirements have provided a boost to Edgar’s business in recent years, said David Price, the firm’s chief financial officer and chief operating officer.
“Our revenue growth has been significant over the last few years as we’ve seen more companies coming to us in regards to the increased implementation of the mandate,” Price said.
“The company hasn’t been profitable for the last three years as we’ve had to build up the people capability to meet that,” he added.
The company reported a net income loss of $194,000 for the first quarter of the year. Those loses are narrow, however, compared to its net income loss of $3.05 million during the same quarter in 2011.
“This is a natural fit with our growing portfolio of financial disclosure management services and a superb match for our clients’ needs for end-to-end solutions,” Tom Juhase, president of RR Donnelley’s financial services offering, said in a statement.
“Our long working relationship with Edgar Online gives us immense confidence in their platform, people and processes. They will bring best in class technology and deep domain expertise in XBRL – an area of vital importance to our clients,” he added.